Mark Carnegie, Australia’s highest-profile cryptocurrency investor, said a 31-year-old South Korean entrepreneur who started the now-collapsed Terraform Labs cryptocurrency business and may be on the run from authorities was “just another one of these super-bright scumbags” who did not understand business history.
Mr Carnegie, the founder of MHC Digital Finance, said he invested in Do Kwon’s luna cryptocurrency, which fell from $120 in April to 0.05¢. Simultaneous falls of another cryptocurrency connected to luna, terraUSD, contributed to a global rout in blockchain assets this year.
Mark Carnegie at The Australian Financial Review Crypto Currency Summit in Sydney this year. Oscar Coleman
“We owned some luna,” Mr Carnegie said from Singapore, where he lives. “We net ended up square or maybe down a bit. With a Ponzi scheme you are trying to get in and out early.”
Some luna investors refer to themselves as “lunatics”. Mr Kwon, who also lives in Singapore, is the subject of a South Korean arrest warrant over the collapse of his business. His location is unknown, and Singapore authorities said on Saturday he was no longer in the city state.
South Korean prosecutors on Monday said they had asked Interpol for help finding Mr Kwon, who has not stopped communicating with his 1 million Twitter followers. On the weekend he appeared to joke about reports that he had become a fugitive.
“Tbh havent gone running in a while,” Mr Kwon tweeted on Sunday, “need to cut some calories.”
Mr Kwon said he would share his location with a friend, someone he wanted to meet, or if they were participating in a “gps based web3 game”.
TerraUSD was known as a “stablecoin”, which meant its value was meant to be fixed to the US dollar. The link broke in May, when investors decided that blockchain currencies were not independent of other investments affected by global economic conditions, including gold, shares and bonds.
“That dream has died in a fire,” Mr Carnegie said. “Everyone who should be using the technology isn’t because they hate the crypto bros. Quite rightly they should hate them because they are such scumbags.”
He said Mr Kwon and other crypto entrepreneurs operating stablecoins were engaged in a form of banking where their financial reserves could not cover, at any one time, their liabilities.
“They have no view of history and no historical context,” he said. “They feel they are discovering everything for the first time. It was leveraged fractional banking, which has been run a gazillion times again and again.”
One Twitter poster responded that Mr Carnegie had lobbied for cryptocurrency funds to be traded on the Australian Securities Exchange. When that was unsuccessful he relocated to Singapore, which had encouraged the funds to set up business there.
“Carnegie turns out be just another crypto bagholder, not the messiah,” wrote a Perth-based account named Talorc.
Bitcoin was trading at $28,943 on Tuesday, down 56 per cent this year.
Mr Kwon was lauded as one of the industry’s leading entrepreneurs before this year’s collapse. He told the Wall Street Journal in June he was probably a billionaire but had lost almost his entire wealth.
“That doesn’t bother me,” he said. “I live a fairly frugal life.”
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